Europe steps up sanctions against Russian energy. On the one hand, this Monday the agreement came into force to apply the embargo to all oil imports from Moscow reaching the European Union by sea. Brussels predicts that by the end of the year it will affect 90% of the crude oil the Kremlin sold to Ukraine’s pre-war Community Club. On the other hand, the 27 agreed on a cap of $60 per barrel exported by sea to third countries, which is already in place. That price cap – agreed by the EU on Friday and followed a day later by the G-7 and Australia – is a way of cutting Moscow’s profits from sales to countries like China or India, which have bought cheap in recent months thanks to the isolation of the regime of Vladimir Putin after the invasion that started on February 24.
With the entry into force of this measure, the most comprehensive of the Kremlin’s energy financing sanctions list, restrictions on Russian gas remain the major challenge ahead, despite Moscow turning off the tap to Europe and the demand for alternatives that most dependent countries, the relevance of this possible measure is greatly reduced.
“the top [al petróleo ruso] it will benefit several actors, for example India,” the Commissioner for Economy and Finance, Paolo Gentiloni, confided on Monday.
Europe very early began to tighten its belt against Russia with economic sanctions: since the beginning of the invasion of Ukraine on February 24, eight packages have arrived, the first three of which were approved almost immediately after the outbreak of war. And the ninth series of sanctions is already being completed, although less and less tools remain in the box.
In Brussels, some 1,300 people and 155 companies are currently blacklisted. Europe has also closed the airspace to Russian flights and its ports to Russian ships, banned access to the SWIFT system of several Russian banks, banned the importation of coal and other solid fossil fuels from Russia – the first energy sanctions imposed on March 8. imposed, as well as the importation of goods such as timber, cement, seafood or alcoholic beverages. It has also been banned for months from buying, importing or transferring gold from Russia, including jewellery, although a similar deal for diamonds ultimately never materialised, especially under pressure from countries such as Belgium, which has a thriving trade in this sector. .
The debate about introducing a gas price cap was also discussed early on, although it was met with strong opposition from countries such as Germany, one of the most dependent countries on Russian gas. However, those discussions lost momentum when Moscow finally voluntarily turned off the tap to tame a Europe tormented by the endless price spiral of this commodity.
As European Commission President Ursula von der Leyen recalled this weekend, Russia has already cut 80% of Europe’s gas supply in just eight months, even though the old continent has managed to fill up to 96%. are reservations for this year, though based on staggering prices and amid measures and tense negotiations between the twenty-seven to contain them.
Exceptions in Hungary and Bulgaria
Nor was it easy to negotiate sanctions on Russian oil, which will have a further step on February 5, when the European embargo on imports of Russian refined products such as petrol or diesel comes into effect. Exemptions have even been negotiated for countries such as Hungary, which can continue to receive Russian oil via a pipeline, or Bulgaria, which has an exemption until 2024 due to its “specific geographical location”.
The Russian government tried to play down the new sanctions on Monday. “Russia and the Russian economy are capable of fully meeting the needs and requirements of the special military operation,” Kremlin spokesman Dmitry Peskov replied, using the euphemism of the Russian authorities for their military offensive in Ukraine, Reuters reported. .
The International Energy Agency (IEA) said in an analysis that Russian oil exports “resisted sanctions, import embargoes and buyer boycotts until October”. In October, Russia’s total oil exports amounted to 7.7 million barrels per day, just 400,000 barrels less than before the war in Ukraine. The sharp drop in European purchases was offset by Russian sales to countries such as India, China and Turkey.
But the embargoes now in place, according to the international organization, will lead to a “new redistribution of trade”, which will cause Russian oil production to fall by almost two million barrels per day in early 2023 compared to before the war. in Ukraine.
And that will hurt the Kremlin, emphasizes Simone Tagliapietra, an analyst at the Bruegel think tank. “Oil revenues are the backbone of Russia’s budget, five times larger than that of natural gas,” he recalled. “The EU embargo is a huge blow to Putin as it will force Russia to refocus on Asian markets and sell its oil at a cap price (…)
In any case, Europe has firmly committed itself to this step. It continues to prepare new sanctions and there are still opportunities to take action: from the ban on the import of uranium, which powers some European nuclear power plants, to new measures against the Gazprombank bank, where Moscow receives the proceeds from the gas it produces. produced. sold anyway. Yet the twenty-seven know that the margin is shrinking.
Source: La Neta Neta
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
